Uncertainty about the interest rate and the Reserve Bank of India's preference for rupee-stability took a toll on trading in government securities, Credence says.

The fall in the volume of securities traded to Rs 82,918 crore in the first half of this fiscal was largely due to a substantial fall in those in the 364-day treasury bills, the report says.

Trades in the 364-day T-bills declined to Rs 8,407 crore in the first half this fiscal against Rs 14,866 crore in the first half of 1997-98. The Credence report attributes this fall in trades to a decline in the outstanding amount of the 364-day T-bills. The outstanding amount of the 364-day T-bills declined to Rs 7,519 crore as on September 23 from Rs 14,339 crore at March-end 1998.

Trades in government of India dated stock, on the otherhand, improved marginally to Rs 66,100 crore from Rs 64,621 crore in the first half of last fiscal. This increase in dated stock trades in the first half was because of an improvement in the same in the second quarter of this fiscal, which stood at Rs 43,016 crore against Rs 39,902 crore in the first quarter, the report says.

On the institutional bond front, most of the trades were in short-end instruments. The IDBI 1999 paper was dealt in the 12.50-12.84 per cent range while that of ICICI for a similar maturity went at 12.52 per cent. Medium-term papers that were traded included the 16.25 per cent IRBI 2001 at an yield to maturity (YTM) of 13.77 per cent.

Trades in the public sector taxable bonds were dull and papers that were traded included the 16.50 per cent PSEB 2003 and SAIL 14 per cent 2005 at a YTM of 14.26 per cent and 13.50 per cent respectively. In the tax-free segment, papers traded included the 9 per cent Hudco 2001 in the 10.03-10.06 per cent range and the 10.50 per cent KRCL 1999 at a YTMof 9.77 per cent.